Weslaco sues construction company hired to build $38.5M water plant

A portion of Weslaco’s water treatment plant remains inoperable. The functioning portions of the plant, however, are able to produce more than enough clean water to keep up with demands from residents and businesses in Weslaco. (Cristina M. Garcia | cgarcia@themonitor.com)

The city of Weslaco filed a lawsuit in October seeking to withhold payment from the construction company it hired to oversee the city’s costly water plant project, eight months after securing $1.3 million from the plant’s engineer.

The city contracted CDM Constructors Inc., a division of Massachusetts-based engineering and construction firm CDM Smith, in March 2012 to head the remodeling and expansion of the water plant as construction manager-at-risk, a method that allowed the city to set a $38.5 million guaranteed maximum price it would pay for the project.

The city, however, was billed above the set price tag, resulting in the lawsuit.

“It is our hope and prayer that the city of Weslaco and its citizens will finally see justice through the Texas legal system and civil litigation process so that we can keep Weslaco moving forward in the right direction,” Weslaco Commissioner Jose Pedro “JP” Rodriguez, elected in 2017, said in a Facebook post.

In 2011, the then city commission decided to move forward with expanding and remodeling the plant, increasing its capacity to meet the water needs of residents and businesses.

It hired San Antonio-based Briones Consulting and Engineering Ltd. and owner Rolando Briones Jr. in October 2011 to design the water plant. Then the commission hired CDM Constructors to build and manage the project for the set price tag.

The city and firms then agreed to a contract.

But CDM Constructors “demanded” $2.4 million more than the agreed price due to a 239-day delay caused by rain, according to the lawsuit filed in district court.

“There is no basis for that in the contract,” said Orlando Garcia, an attorney with the Law Office of Ramon Garcia whose firm was hired to represent the city.

The set cost could increase under certain provisions “such as weather delays,” which pushed back the project’s completion to August 2017, according to a response filed last month by Gregory Sapire, the attorney for CDM Constructors.

Sapire declined to respond to questions about the lawsuit, saying “CDM has a practice of not commenting on pending litigation.”

The delay was also caused by “untimely approvals of requests for information” from the city and change orders, according to Sapire’s response. The lawsuit does not detail the information the city requested from the construction company it hired in 2012, when the city commission was controlled by another political faction and the city was under the direction of another city manager.

Earlier this year, the current city commission voted to file a lawsuit against the construction company, refusing to pay the additional $2.4 million it demanded. In January, Weslaco and the plant’s engineer agreed to a $1.9 million settlement after the city successfully refused to pay the firm $600,000.

“The city wants the public to have some understanding of what’s going on because this involves money that is ultimately coming from the taxpayers,” Orlando Garcia said.

The lawsuit against the plant’s construction manager at-risk remains in the discovery phase, and the attorney representing the city said other claims could be added in the future.

In addition to lawsuits, there’s word of a potential federal investigation into the costly water plant deal, further intensified by an FBI subpoena delivered to the city in March. City records dating back to 2009 were turned over to a federal grand jury in April as part of the subpoena.

The FBI, however, does not comment on whether or not a criminal investigation exists.

A judge has not set a trial date or hearing in the civil case against the construction company. And although the city poured millions of dollars into the water plant, a portion of it remains corroded, rusted and inoperable.

“We would like to get an answer — one way or another — within a matter of months, not years,” Orlando Garcia said.